It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in PCSB Financial Corporation (NASDAQ:PCSB).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At PCSB Financial
The Vice Chairman & Lead Independent Director Richard Weiss made the biggest insider purchase in the last 12 months. That single transaction was for US$72k worth of shares at a price of US$13.05 each. That means that an insider was happy to buy shares at around the current price of US$15.94. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the PCSB Financial insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 10.13k shares worth US$145k. But they sold 1.20k shares for US$19k. In the last twelve months there was more buying than selling by PCSB Financial insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
PCSB Financial is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
PCSB Financial Insiders Are Selling The Stock
We have seen a bit of insider selling at PCSB Financial, over the last three months. Independent Director Michael Weber divested only US$19k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Insider Ownership of PCSB Financial
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that PCSB Financial insiders own 5.9% of the company, worth about US$14m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The PCSB Financial Insider Transactions Indicate?
Our data shows a little more insider selling, but no insider buying, in the last three months. But the sales were small, so we're not concerned. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think PCSB Financial insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing PCSB Financial. Case in point: We've spotted 1 warning sign for PCSB Financial you should be aware of.
Of course PCSB Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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